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From: D R
What is wrong with x-collaterallisation?
Ok, we have all heard that is is better to structure your finances such that each IP is stand alone.
What I would like to know is, what are the major advantages to x-collaterlisation?
For example. If you have 6 IPs and want to have one big LOC(Line of credit) then x-coll is the only way to do it. Please correct me if I am wrong.
Sure, keep your own home as stand alone so that the Tax Man can clearly see what is personal debt and what is investment. But when you get a few IPs going then why not x-coll. It is very easy to refinance each IP to another lender even when they are x-coll. Just remove that property as security from the mortgage and payout its part of the debt from the money you get after refinancing.
Can anyone else add to the disadvantage/advantage thing.
I am sure there are heaps(well, a couple anyway) of people out there that would be able to add to this topic.
Cheers
DR
What is wrong with x-collaterallisation?
Ok, we have all heard that is is better to structure your finances such that each IP is stand alone.
What I would like to know is, what are the major advantages to x-collaterlisation?
For example. If you have 6 IPs and want to have one big LOC(Line of credit) then x-coll is the only way to do it. Please correct me if I am wrong.
Sure, keep your own home as stand alone so that the Tax Man can clearly see what is personal debt and what is investment. But when you get a few IPs going then why not x-coll. It is very easy to refinance each IP to another lender even when they are x-coll. Just remove that property as security from the mortgage and payout its part of the debt from the money you get after refinancing.
Can anyone else add to the disadvantage/advantage thing.
I am sure there are heaps(well, a couple anyway) of people out there that would be able to add to this topic.
Cheers
DR
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